These are several benefits that the Employees Provident Fund Organization EPFO provident fund envisages for its members. These EPFO provident fund benefits also include free insurance and pension benefits. Basically, an employees’ Provident Fund (PF) account is usually considered a retirement-oriented investment option, which is mandatory for every and each employee who fulfills Rs 15000 threshold for monthly PF contribution. An employee gets tax exemption under Section 80C of the tax act on one’s PF contribution up to Rs 1.5 lakh in single fiscal year .
Here are 5 key pointers that Employees needs remember of:-
1] Free insurance: A Provident Fund Account holder by default becomes eligible for free of charge insurance up to Rs 7 lakh just in case of death during the service period under EDLI (Employees Deposit Linked Insurance Scheme). Earlier, the death protect PF account holder was Rs 6 lakh but now it’s been enhanced up to Rs 7 lakh. most significantly , the PF account holder needn’t to pay any premium for this death cover provided under the EDLI.
2] Pension provision: A PF account holder is eligible for pension after 58 years also . However, to be eligible for pension, a minimum of 15 years regular monthly PF contribution and a PF account is required. The pension benefit comes from the employer’s contribution as 8.33% of its contribution (out of 12%) goes to the EPS account of the PF account holder.
3] Loan against PF: within the case of monetary emergency, a PF account holder can take loan against one’s PF balance and therefore the PF loan rate of interest levied is merely 1%. The loan are going to be short term in nature and has got to be repaid within 36 months of loan disbursal.
4] Partial withdrawal during emergency: EPFO allows partial withdrawal just in case of medical or financial emergency subject to some terms and conditions.
5] home equity credit and hole loan repayment: a private can use their PF account for home equity credit repayment. As per the EPFO rules, they will withdraw up to 90% of the PF balance for purchasing a replacement home or constructing a home. they will also buy land also using one’s PF balance DLI.